Welfare turns into workfare, but unpaid work won’t solve the jobs crisis

The Government’s ‘work experience’ programme has been moving up the news agenda, with the FT, the Express and the Daily Mail among those whose reports of yesterday’s ‘error’ (when an unpaid placement was advertised as a ‘vacancy’ on the Jobcentre Plus website) defined the programme as a ‘workfare scheme’. And even the Institute for Economic Affairs has recognised that the schemes provide free labour.

How has this happened? ‘Work Experience’ started out with a limited number of places, and was launched as part of the ‘Get Britain Working ‘ programme in early 2011. At that point DWP stated that the aim of the programme was to ‘help maximise the number of young people moving into employment and provide young people with quality work experience’. Initially, placements were only available in 14 areas across the country and were limited to young people aged 18-21. Placements are not technically compulsory, but once a young person has indicated that they want to undertake a work experience placement if they pull out their benefits will be docked.

Reports on the substance of these placements suggest that they are far from the ‘quality work experience’ that the Department purportedly aspires for them to be. No qualitative evaluation of the scheme is currently available, although ACEVO focus groups (pdf) with young participants suggest that several feel ‘exploited’. Employers participating in the scheme face no requirements to provide training, no limits on the number of placements provided per site, do not have to provide a guaranteed job interview at the end of the placement and are not actively monitored to ensure that existing workers are not being denied overtime (or in the worst case scenario being made redundant) as a result of the unpaid work being undertaken. In addition, reports suggest that the vast majority of placements are in the retail sector – hardly providing a range of experience for young people who are likely to have far more varied employment aspirations.

Early outcome data from this initiative was published in November 2011. It found that after 13 weeks on the programme, 49% of participants were still claiming benefits. But over the same period, the normal rate of departure from JSA for young people was higher, with an average of 47% of young people across the JSA caseload still claiming at this point. If anything this early data suggests the scheme is making it slightly harder for young people to find work, as spending eight hours a day undertaking unpaid work may be making it more difficult for them to focus on applying for jobs in the open labour market. This wouldn’t be surprising, the DWP’s own evaluations of workfare schemes in other countries have found the same effect, also concluding that:

There is little evidence that workfare increases the likelihood of finding work.

But despite these indications that the scheme is not operating as planned, the introduction of the ‘Youth Contract’ saw the number of places available on work experience significantly increase, with the Department now committed to sourcing at least 100,000 placements a year. Whether this will be possible given the increased PR risk for participating employers remains to be seen. Sainsbury’s, TKMaxx and Waterstones have reportedly already pulled out, and as the bad publicity continues is seems inevitable that more will follow.

‘Work Experience’ is not the only source of unpaid work that is now integrated into our welfare to work system. Mandatory Work Activity, a compulsory four week work experience scheme for jobseekers who are meeting the terms of their Jobseekers Agreement (the requirement placed upon JSA claimants to actively look for work and to demonstrate to Jobcentre Advisers that they are undertaking jobsearch and applying for vacancies) but are perceived by advisers ‘not to be doing enough to look for work’, is now also operational. Placements are purportedly of ‘community benefit’.

When this scheme was introduced, the Social Security Advisory Committee (SSAC) (declared interest – I am a member) formally referred the regulations for consultation, and published this report on their likely impacts – which recommended that the programme should not proceed. The Government rejected the Committee’s main conclusions, and noted the Committee’s concerns, including the lack of available information on what type of work the placements would involve, the intensive nature of the placements which was likely to leave those with, for example, childcare responsibilities struggling to participate (and therefore at higher risk of having their benefits stopped), the risk of employers using rolling placements to cover what would otherwise be real (paid) job vacancies and the lack of checks to prevent this risk. In response to the report the Government agreed to ‘robust monitoring of placements’ covering issues including access to training and placement quality. The Government also stated that the intention of the scheme was that only a ‘small number’ of jobseekers would be referred to it.

The most recent data on this scheme suggests that all is not well. So far just over 24,000 people have been referred, hardly a ‘small’ number. No ‘robust monitoring data’ appears to be available on scheme quality or on placement type, other than a Guardian report that ‘community benefit’ placements are now taking place in the retail sector. No data are available on the outcomes the scheme has led to, including on the number of participants who have found work. In particular the recent data release didn’t trace the source of these statistics, presumably released directly from a Ministerial office to the press, which suggest that significant numbers of those referred stop claiming. If this is true it’s extremely concerning – it likely means that SSAC’s concern that those facing additional travel expenses or barriers to participation, such as childcare, may drop out of the benefits system as a result of the scheme (either as a result of being sanctioned as they are unable to participate or because they decide they simply can’t meet the terms of the unpaid work requirement) may be being realised.

These are the two most significant sources of unpaid work currently in the system, but there are more. The Work Programme, which most unemployed people are referred to after a year (nine months for young people) allows providers to refer jobseekers to any form of provision they think appropriate, which could in theory involve unlimited unpaid work experience. And for those who are still out of work after the Work Programme has attempted to support them the Community Action Programme for the very long-term unemployed (those out of work for over two years) is currently being piloted and involves unpaid work of up to 26 weeks. In addition, today’s papers suggest that the Work Related Activity that those claiming Employment and Support Allowance (ESA) are required to undertake could shortly be extended to require unlimited unpaid work.

This increasing prevalence of unpaid work is a significant worry, because put simply there is no evidence at all that it will work as a means to increase job outcomes. That’s not to say that proper work experience isn’t beneficial, just that the particular brand currently on offer if falling well short of the mark for many participants. The consensus of expert opinion and academic research is that unpaid work achieves at best very little and at worst makes paid employment for claimants less likely while simultaneously reducing the hours of existing staff and limiting the number of paid vacancies in the jobs market. Requiring unemployed people to work for their benefits may be publicly popular, but as a means to reduce worklessness it’s unlikely to be successful – which will have far wider economic costs in the longer term.

Written by Nicola Smith

I’m Head of the Economic and Social Affairs Department at the TUC. I also represent the TUC on the Social Security Advisory Committee. My posts may therefore range from the environment to the welfare state via macro-economic policy but will inevit…

7 Responses to Welfare turns into workfare, but unpaid work won’t solve the jobs crisis

The government, of course, are only interested in looking after their big business chums and damn the rest of us including the economy in which we all exist. Workfare does its job admirably, its job being to funnel taxpayer money into private companies, as are all welfare reforms. With the Atos testing the path was less easy to see, particularly if, convinced by the Daily Mail all the disabled were scroungers anyway, you weren’t looking. The so-called disability testing is an absolute failure by any standards, so the only reason the government can have for keeping it going is to funnel money from the pubic purse into Atos the private company. One assumes they’ll be getting their share in some form at some time and no doubt favours will be returned from the big businesses being supplied with an unending stream of free staff. This is criminality writ large; many prominent members of the Coalition clearly belong in the dock where they might be forced to answer the questions they so easily evade in the House and the media.

“Also, it will allow business to lower their wage bill thus ramping up the profit margins nicely.”

Not when it’s taken to its logical conclusion. If one company does it then all their competitors have to do it too, then related companies, then it’s everywhere. What does that do? Reduce demand. If everyone’s working for no wages then down go sales and profits along with them. This is not a policy grounded in any economic foundation but instead it’s an expression of utter malevolence, spite. All the politicians involved in this, Grayling, Duncan-Smith, Miller, Dame Black, Lord Freud, are nasty, nasty people. They’re clearly unfit for any form of public office.

It is right and proper that those receiving benefits should have to do some work in return. The ‘quality’ of the placements is neither here nor there. They have to get up and attend, establishing a working pattern to their lives. The majority of people in this country are sick and tired of paying for some others to sit around on their ar*es while the rest of us graft. Stop the liberal bleating about ‘slavery’ – this is pure nonsense. Get the lazy b*stards off their addiction to Jeremy Kyle and out into the work place. Benefits that I pay for are their salary!!!!!!

Disabled people are in line for reprogramming so that they accept their disabilities are all in their minds. They are being shoved into the workplace even though unfit. They are being persucuted right under your very nose. 90% of current DLA claims are being refused.

Coastliner, the vast majority of unemployed people don’t watch the mindnumbing crap that is Jeremy Kyle. I am afraid you have probably been reading the Daily Mail too much and believing it to be the absolute truth. The REAL problem in this country is that there isn’t enough work to go around. When I was at school, I took economics at GCSE and one of the subjects you learn about is the supply and demand for labour. In Britain, we have too much labour and not enough demand for it. It is a shame that we have employment ministers and chancellors who don’t understand this basic principle in economics.